Underwriter

Underwriter can be defined as a company or any other entity whose job is to administrator the public issuance and the distribution of the securities from a company, corporation or any other issuing authority. The responsibility of an underwriter is to work closely in cooperation with the issuing authority so that it can determine the offering price of the securities buys these securities from the issuer and sells these securities to the buyers in the market under the distribution network of the underwriter.

In order to do or to monitor the entire process underwriter usually require fee from the client that is requesting the underwriter to perform the entire function on for his company. In order to the fees the underwriter also earns profit from the investor when he sells underwritten shares to the investors within the market. It is the duty or the responsibility of the underwriter to sell all the securities that are issued for the public. If an underwriter cannot sell the securities on the specified price at which these securities are issued the underwriter is forced to sell these securities at some low price or less than the price that is paid for them. If the price offered for the securities in the market is too low as compared to the specified price of the securities the underwriter may retain the securities themselves.

Other Related Accounting Articles:

• Offering Price
• Underwriting
• Open Market Transaction
• Bid Wanted
• Contra Market
• Open Ended Management Company
• The Concept of Accountability in Accounting
• Vulture Fund
• Bulldog Market
• Margin Account